Many endowment policy owners hold policies in closed funds, around £160BN is tied up in these funds.
Closed funds are funds that are closed to new business.
These funds, because they are closed, do not have the same incentive to try to show a good return on their funds and thus attract new investors.
Policy holders are faced with the dilemma of choosing between staying with the fund or exiting, and thus incurring exit penalties.
The Telegraph discussed these issues in a recent article. You can read it via this link Closed Funds.